Author Topic: How to pick funds?  (Read 824 times)

Lindsay517

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How to pick funds?
« on: July 17, 2018, 02:35:20 PM »
Hi Everyone,

I'm looking to possibly make some changes to my 403b account at work (hopefully changing to 457 now that I know the difference). Does anyone know the best way/have any suggestions on how I should evaluate my options? I know low expenses are the best way to go, I'm just kind of overwhelmed by choices and how to determine asset allocations.  My account is with TIAA Cref. Thank you!!

RWD

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Re: How to pick funds?
« Reply #1 on: July 17, 2018, 02:47:07 PM »
If you list your options we can point out the best candidates. Asset allocation preference depends a lot on your personal situation. How old are you, risk tolerance, desire for simplicity, etc. Check out the following resources as a good starting point:
https://www.bogleheads.org/wiki/Asset_allocation
http://jlcollinsnh.com/stock-series/

Lindsay517

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Re: How to pick funds?
« Reply #2 on: July 18, 2018, 11:26:11 AM »
QCEQPX:NASDAQ Estimated expense 0.3%
QCGLPX:NASDAQ Estimated expense 0.4%
QCGRPX:NASDAQ Estimated expense 0.32%
QCSTPX:NASDAQ Estimated expense 0.37%
TCIEX:NASDAQ Estimated expense 0.06%
TRLIX:NASDAQ Estimated expense 0.4%
TRPWX:NASDAQ Estimated expense 0.47%
TIMVX:NASDAQ Estimated expense 0.41%
TISPX:NASDAQ Estimated expense 0.06%
TISBX:NASDAQ Estimated expense 0.06%
QCBMPX:NASDAQ Estimated expense 0.37%
QCILPX:NASDAQ Estimated expense 0.31%
TIBFX:NASDAQ Estimated expense 0.31%
QCMMPX:NASDAQ Estimated Expense 0.3%
VMFXX:NASDAQ Estimated Expense 0.11%
QCSCPX:NASDAQ Estimated Expense 0.33%
TTRIX:NASDAQ Estimated Expense 0.45%
QREARX:NASDAQ Estimated Expense 0.79%

I just turned 27, I have a high risk tolerance since I'm still fairly young, simplicity is nice (which is why I'm tempted to just do the "lifecycle fund". Hopefully I wrote all of that out right and it makes sense but if not I will delete and rewrite. Thank you!




Radagast

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Re: How to pick funds?
« Reply #3 on: July 18, 2018, 12:53:26 PM »
TCIEX:NASDAQ Estimated expense 0.06%
TISPX:NASDAQ Estimated expense 0.06%
TISBX:NASDAQ Estimated expense 0.06%
Expenses matter. Just direct 1/3 of your contributions to each of these and you will be fine as a starting point.

Lindsay517

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Re: How to pick funds?
« Reply #4 on: July 19, 2018, 07:46:30 AM »
TCIEX:NASDAQ Estimated expense 0.06%
TISPX:NASDAQ Estimated expense 0.06%
TISBX:NASDAQ Estimated expense 0.06%
Expenses matter. Just direct 1/3 of your contributions to each of these and you will be fine as a starting point.

Radagast--Do you recommend these three simply because they have the lowest expenses?

the_gastropod

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Re: How to pick funds?
« Reply #5 on: July 19, 2018, 08:40:55 AM »
Those three all look pretty good. To save everyone else looking some time:
TCIEX is international equities index
TISPX is S&P 500 index
TISBX is small cap blend index

1/3 in each doesn't sound like a bad setup. I'd definitely do 1/3rd in international (TCIEX). The remaining two, you can tweak a little bit. Small cap is a higher risk, so you might want to do 40% TISPX, 20% TISBX or something like that to lower your risk slightly.

Lindsay517

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Re: How to pick funds?
« Reply #6 on: July 19, 2018, 08:48:53 AM »
Sorry! I wasn't sure the best way to label them. Thank you the_gastropod! I appreciate the feedback from this group. I'm working to do my best to make myself more financially literate with investing because I feel like I'm way behind the curve.

Radagast

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Re: How to pick funds?
« Reply #7 on: July 19, 2018, 09:24:16 AM »
TCIEX:NASDAQ Estimated expense 0.06%
TISPX:NASDAQ Estimated expense 0.06%
TISBX:NASDAQ Estimated expense 0.06%
Expenses matter. Just direct 1/3 of your contributions to each of these and you will be fine as a starting point.

Radagast--Do you recommend these three simply because they have the lowest expenses?
What gastropod said. I actually sorted out the 5 lowest cost funds, but the other two were money market funds which are not useful in tax-sheltered accounts when you have many years ahead of you. 1/3 in each of of large US companies, small US companies, and international companies is a great allocation. 35% in international has historically been about optimal, but it fluctuates over time +/-35% or so. There are infinite ways to divide it up and a large number are equally reasonable, but if anyone thinks that 1/n weighting is sub-optimal compared to some other weighting they probably just don't realize how unknowable the future is.

Lindsay517

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Re: How to pick funds?
« Reply #8 on: July 20, 2018, 08:11:22 AM »
Thank you!! I made the adjustments and I'm feeling much better about my account. I do have another question though. My husband's 401k does not really seem to have any good choices. I know everyone says invest in 401k because of company match is free money, I'm just not sure if it's worth it? His company will match $0.30 per $1 invested, and employee can contribute up to 5% and get matched. I'm just trying to figure out if we should change to only contribute minimum to get match or if he should stop contributing completely and open up IRA somewhere else with better options (vanguard, schwab, etc).

PBMXX Money Market expense 0.67%
Prudential Total Return Bond Fund expense 0.78%
Prudential Day One IncomeFlex Target Balanced Fund expense 1.74%
AMECX American Funds Income Fund 0.56%
RMFEX Large Cap Stock-Value 0.64%
DODGX Large Cap Stock-Value 0.52%
FRDPX Large Cap Stock-Blend 0.90%
AGTHX Large Cap Stock- Growth 0.64%
VETAX Mid Cap Stock-Value 0.90%
FSCAX Small Cap Stock-Blend 1.26%
FCAGX Small Cap Stock-Growth 1.36%
AEPGX International Stock-Growth 0.82%

Radagast

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Re: How to pick funds?
« Reply #9 on: July 20, 2018, 09:20:54 AM »
Those are somewhat high, but tolerable. See this thread https://forum.mrmoneymustache.com/investor-alley/investment-order/
Select one of the three lowest cost funds after checking to see that it hasn't done anything terrible so far and has generally not trailed the S&P500 by much. Put money in that to get the full employer match. Then max out an IRA at Vanguard or Schwab as you said. When that is maxed out return to the 401k.